The Top-Performing Biotechs in 2012 and 1 to Watch in 2013

With 2012 nearly in the books and the Mayan prophecy just two weeks away from wiping out all of our gains (sorry, couldn't help myself), I thought it would be a good reflective activity to see what biotechnology stocks led the sector higher, why those stocks had such a banner year, and examine one company that might have as equally a good year in 2013.

As you might expect, with 178 publicly traded biotech companies, there were some wild moves. I've stripped out some of the smallest companies out there, so we can focus on the meat-and-potatoes of what caused biotech to have such a great year.

Company

Year-to-Date Performance

Sarepta Therapeutics (NASDAQ: SRPT  )

512.89%

BioDelivery Sciences Int'l (NASDAQ: BDSI  )

418.52%

Arena Pharmaceuticals (NASDAQ: ARNA  )

364.17%

Galena Biopharma (NASDAQ: GALE  )

361.70%

Celsion (NASDAQ: CLSN  )

335.88%

Source: Finviz.com. Data as of Dec. 5, 2012, close.

It's hard to believe, but Sarepta has actually had quite the pullback from its highs. From its 52-week low to its high, Sarepta had a 14-fold move higher, led by extremely positive mid-stage data on eteplirsen, its experimental Duchenne muscular dystrophy drug. In trials, the drug demonstrated a degradation of the disease and gave patients an 89-meter walking distance improvement over a six-minute period versus the placebo. In short, eteplirsen didn't just abate the symptons; people were actually getting better! It'll be worth watching in 2012.

BioDelivery Sciences International has been rallying since the gavel hit the wood to open 2012 on the heels of an expected new drug filing for its opioid dependence drug, BEMA Buprenorphone/Naloxone. Late-stage trials of the drug met their efficacy endpoint, and a new drug application is expected from BDS by the second quarter of 2013. In addition, BDS is running an ongoing late-stage trial for Buprenorphine as a chronic pain management drug with Endo Pharmaceuticals

Arena Pharmaceuticals fattened up this year following FDA approval of its weight control management drug, Belviq. With its peer VIVUS' (NASDAQ: VVUS  ) Qsymia failing to secure approval from the European Medicines Agency and with its sales limping out of the gate, Arena looks poised to utilize immediate coverage from Aetna (and hopefully other insurers) to sweep the domestic and international markets.

Galena Biopharma plugged has plugged higher by a cool 361.7% on the back of strong mid-stage data on its experimental cancer drug, NeuVax. Currently, Galena has its sights targeted at treating breast cancer as a first-line treatment, as well as in combination with Roche's (NASDAQOTH: RHHBY  ) Herceptin. Mid-stage data regarding NeuVax's ability to target cells expressing low-to-moderate levels of HER2 are encouraging, but as my Foolish colleague Rich Duprey noted through TheStreet's Adam Feuerstein, Galena may have done quite a bit of data mining to get its desired results. 2013 will definitely be a pivotal year for the company.

Finally, Celsion has been rallying at a feverish pace in anticipation of a January release of late-stage data for its hepatocellular carcinoma treatment known as ThermoDox. What makes this study so unique – since ThermoDox isn't a new compound -- is the pathway by which it's delivered. The drug is injected into patients and then activated by radio frequency ablation at the location of a patients liver tumor(s). Given that this trial has been running for four years now, investors are getting awfully anxious for the results. 

1 biotech to watch in 2013
OK, OK... I know I've been beating a dead horse with this one over the past week, but since when do you know me as someone who gives up easily? The company on my radar in 2013 is Exelixis (NASDAQ: EXEL  ) .

There had been some concern that Cometriq (formerly cabozantinib) may not be approved since the FDA completely removed its FDA panel meeting with Exelixis in late August and never rescheduled the review. That all went out the window last week when Cometriq received approval to treat metastatic medullary thyroid cancer, or MTC, after exhibiting an incredibly strong median progression-free survival time of 11.2 months compared to the placebo at four months. With only AstraZeneca's (NYSE: AZN  ) Caprelsa in place to treat MTC, it seems like a lock that Cometriq will be the MTC drug of choice.

Beyond just MTC, Exelixis will be working on advancing Cometriq through additional cancer indications including castration-resistant prostate cancer. Currently, Exelixis has two ongoing late-stage trials for prostate cancer to measure Cometriq's efficacy in terms of prolonging patient survival rate and reducing pain, as well as mid-stage trials targeted at (not kidding) nine different cancers! 2013 is going to be a decisive year for Exelixis as it rolls out Cometriq, potentially seeks out a partner, and reports a slew of mid-and-late-stage data.

When it comes to do-or-die business, the biotech industry takes the cake. Arena Pharmaceuticals is one recent success story in the industry after gaining FDA approval for its innovative obesity drug. While the future looks bright for Arena, there are still plenty of obstacles ahead. In our brand new premium research report on Arena Pharmaceuticals, we walk investors through the must know opportunities and threats facing the company. Since key news can develop quickly, we're also including a full year of updates for those who sign up. Click here now to learn more.


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